Is a flattening yield curve a sign of a coming recession?

Question:Is a flattening yield curve a sign of a coming recession?

Bob Rauch, R.A. Rauch & Associates

NO: The yield curve has predicted whether future GDP growth will be above or below average, but it does not predict an actual number. Probability is itself subject to error and differences could arise from changes in international capital flows or inflation expectations. Ergo, yield curves should be interpreted with caution. Eventually, we will be in a recession but don’t lose any sleep over it as the yield curve is just one of many indicators.